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Bah sounds like too much time/effort. If no objections I’ll keep doing what I’m doing[quote]
Fine but my method isnt a system as such with set rules which govern all the aspects of the trade.
Its a discretionary method which while it has rules are applied as achart develops. While I aim for a high win rate I’m more interested in very low losses and high wins = more reward for Risk.
I would abandon anything which after a period of discretionary trading I found was not returning a positive expectancy.
I certainly would NOT discard a method which showed a positive expecatncy but had a win rate of less than 50% infat the larger majority of Longer term methods have a low win rate characteristic as T/T does but huge R/R.
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This may be another major point of difference between us tech, I like to try and set rules that will enable me the greatest automation possible. That way if something occurs I don’t have to analyse each and every individual situation as if it’s unique.
[quote]
Perhaps look at your nature!
Outliers have secured my financial future.
Reliable repetitive profits (Business /Trading/ Proprty) maintain my lifestyle while I sit on Trainlines waiting for the next outlier to hit!
A diversification in each has proven for me atleast that 80% of my time Ill be reaping the 20% which keeps me going (Actually more like 95%)
and 20-5% of the time BINGO![/QUOTE]
Oh I’ve had my fair share of outliers tech. Remember when I spoke about Pure Energy trade I did and you challenged me on it? That was an outlier (and one of my best ever trades which is why I was proud of it). The question for me though is one of consistency, sure if I can literally smell the money wafting off the trade I’ll break my own rules and have what I consider to be a punt, but for me it’s not a repeatable and predictable occurance.
I’d much rather have a system that gets me 4-6% a week consistently, than get a half dozen speccy trades that get me 1000% in a year. I know I might be missing out – but hey – no stress ulcer yet.
[quote=”Synergy, post: 534424″]Sorry to disturb the little private chat here. Good reading so far though.
[/quote]
Welcome – although my posting rate tends to be a little unpredictable so don’t be surprised if it takes me some time to answer.[quote]
Here are a few ideas for discussion. These are a few random thoughts I’ve written down over my time doing this that I feel don’t really get a lot of consideration. All are related to short term systematic trading. Feel free to discuss/tear appart any of them.
– Stops should not only be placed to catch a falling stock, but also to sell a stock that is likely to underperform a new trade.
[/quote]
define “likely” with math for me.
You must have had a reason to enter the first trade, a target price or expectation of movement, otherwise you would never have entered it. Given what I would consider to be an appropriate level of diversification across your trades, you should have scope to enter a great many trades. I can only speak for my system (which uses leverage), but it’s rare that I will use any more than about 70% of the available funds.
In many circumstances trading is a negative sum game in that you have to pay for brokerage to enter and exit. If you stop it out merely because you [I]think[/I] you see something better, your opportunity cost is therefore the exit, entry and exit cost of your brokerage on the old trade and new trade. IE you increase your costs significantly to enter the new trade. That means that the new trade has to perform that much better to make it worth your while. I’d be hesitant to close something out just because something else looks better right now. Having said that I do have a time-orientated rule built into my system.[quote]
– It’s likely that the point of break even holds little importance to anyone but yourself, yet it’s treated like a magical number that holds more importantance than prices either side of it.
[/quote]
It’s not something I pay massive attention to except in specific time orientated circumstances.
[quote]
– Pyramidding makes sense when the risk:reward of the pyramidded portion of the trade outweighs that of a new trade. Each trade must be taken on it’s own merrits, regardless of whether you already have a holding in that stock. (I can’t get pyramidding to work with my breakout system. If I could I would be questioning whether my entry needed to be advanced further into the trend)
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I don’t like to average up or down on trades over the time period that I trade, but then I have quite a complex positional model that I took me a while to build…and it works.
[quote]
– More time should be spent matching the number of buy signals to what the system can trade. Excess buy signals means weaker trades could be filtered out. Insufficient signals results in lost oportunity. If the system is not fully invested, buy parameters should be loosened to allow weaker signals to be bought. If taken up, weaker trades should be sold to allow room for trades likely to be more profitable.
[/quote]
Once again define “weaker” with math for me. I firmly believe that the nature of our markets is not ordered and completely predictable. Rather it is chaotic in nature, and subject to influences that are beyond control. If I were to attempt what you describe in my system I would need to put some values around what I consider to be weaker and stronger trades and then back-test. I get the feeling I would be testing for a very long time for not very much additional return. [quote]
– More time should be spent minimising the time in trades. % gained per Day held is an important system performace indicator.
[/quote] I agree with tech. The risk of closing out a potential big winner simply because it has a small mid cycle consolidation on the basis of some derived number would be significant. [quote]
Would be interested to hear what other peoples average trade length is for their short term systems. I wonder if there is a fair amount of similarity or a wide spread.
[/quote] My average length in trade is just under three weeks[quote]
My breakout system averages around 7 days, with many trades cut at 4 days. I have found this to work well for the asx and the amount of trades my system can buy. If there were more stocks on the asx, my trade duration may well be shortened.[/QUOTE]
Well if it works for you….keep doing it 🙂
Cheers
Sir O
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